People with significant control in the UK: Frequently asked questions

In the wake of changes to the UK’s PSC regime made by the Economic Crime and Corporate Transparency Act 2023 (ECCTA), we’ve compiled a list of frequently asked questions about PSCs.

Why was a PSC register introduced?

The Companies Act 2006 underwent several modifications with the introduction of the Small Business, Enterprise and Employment Act 2015. One of the most notable changes was the establishment of the PSC register. The Act’s primary objective was to enhance the transparency of ownership and control of UK-based companies, fight money laundering and foster greater trust in the country’s businesses.

What updates will the ECCTA bring?

The ECCTA became law in February 2024, but as of this writing, the related changes to the UK PSC regime are not yet in force. Once the reforms take full effect, the PSC regime will experience several key changes. One noteworthy revision is that companies and limited liability partnerships (LLPs) will no longer need to maintain separate PSC registers. Instead, they will be required to upload details of their PSCs to Companies House, which will serve as the central register for PSCs. The PSC regime will undergo additional changes, including ID verification requirements for both individuals and nominated managing officers in the case of legal entities that are PSCs.

Does my company have to have a PSC register?

All UK companies must maintain a PSC register, including those limited by guarantee and UK LLPs. However, some companies (in particular those with voting shares admitted to trading on a UK- or EU-regulated market — or certain specified markets in Israel, Japan, Switzerland or the US) are exempt from keeping a PSC register. Except in limited circumstances, a company or LLP must keep its PSC register at its registered office address. Even after the ECCTA's changes take full effect, companies and LLPs may still choose to keep a separate PSC register for good governance.

Who — or what — can be a PSC?

A PSC can be an individual or a relevant legal entity (RLE). Individuals or RLEs may meet one or more of the conditions listed in the next section (“How do I identify a PSC?”) in relation to a company or LLP. An RLE is registerable in relation to a company or LLP if it meets any one or more of the conditions in the next section and:

• It keeps its own PSC register
• It has voting shares admitted on a UK- or EU-regulated market or certain specified markets in Israel, Japan, Switzerland or the US

How do I identify a PSC?

An individual or RLE is registrable on the PSC register if they meet any of five separate conditions in relation to a company or LLP.

For companies, these five separate conditions are:

1. Holds, directly or indirectly, more than 25 percent of the shares in the company
2. Holds, directly or indirectly, more than 25 percent of the voting rights in the company
3. Holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company
4. Has the right to exercise, or actually exercises, significant influence or control over the company
5. Exercises significant influence or control over the trustees of a trust or partners of a firm, where that trust or firm is not a separate legal entity, but where those trustees or partners would otherwise meet the conditions above

Conditions one through three differ slightly for LLPs, as follows:

1. Holds, directly or indirectly, the right to share in more than 25 percent of any surplus assets on a winding-up
2. Holds, directly or indirectly, more than 25 percent of the rights to vote on those matters which are to be decided by a vote of the members of the LLP
3. Holds the right, directly or indirectly, to appoint or remove a majority of the persons who are entitled to take part in the management of the LLP

Identifying a PSC can be challenging and requires carefully considering various factors. For instance, determining whether an indirect PSC holds a majority stake and shareholders with joint arrangements are some aspects that may complicate the process. In particular, identifying PSCs that meet conditions four or five may require analysing your corporate structure or governance arrangements or seeking professional legal advice.

What information do I need to update my PSC register?

To update their PSC register, individuals must provide the following information:

• Full name
• Service address
• Usual country/state of residence
• Nationality
• Date of birth
• Usual residential address (unless you provide it as the service address, this will not appear on the public record)
• The date on which the individual became registrable as a PSC
• Nature of control

To update their PSC register, RLEs must provide the below information:

• Corporate/firm name
• Registered/principal office
• Legal form and governing law
• Applicable company register (if any) and company registration number
• The date on which the legal entity became registrable as a PSC
• Nature of control

What are the options if I believe the company does not have a PSC or the PSC has not been identified?

A company’s PSC register must contain information about its PSCs or registrable RLEs or an update on the status of its investigations into possible PSCs. It must never be empty. When a company cannot get information about its PSCs, its PSC register must make that clear. A company may choose from the statements below to indicate its status, depending on the circumstances. When a statement ceases to be true, the company must update the register with accurate information and file the appropriate PSC form with Companies House.

• The company knows or has reasonable cause to believe that there is no registrable person or registrable RLE in relation to the company.
• The company knows or has reasonable cause to believe that there is a registrable person in relation to the company, but it has not identified the registrable person.
• The company has identified a registrable person in relation to the company, but all of the required particulars of that person have not been confirmed.
• The company has not yet completed taking reasonable steps to find out if there is anyone who is a registrable person or a relevant legal entity in relation to the company.
• The company has given a notice under section 790D of the Act which has not been complied with.
• The registrable person or registrable legal entity shown below has failed to comply with a notice given by the company under section 790E of the Act.
• The company has issued a restrictions notice under paragraph 1 of Schedule 1B to the Act.

The above also applies to LLPs

Under the Companies Act 2006, if a company has reasonable cause to believe that a person is a PSC (or reasonable cause to believe that a person knows about another person who is a PSC), it must serve written notice to that individual. There are also requirements for the person who receives the notice to respond. Companies and LLPs should keep these requirements in mind when updating their PSC register.

What is meant by “other legal entity?”

The law makes special provisions for companies owned or controlled by other registrable persons (ORPs), such as:

• A government or government department (local or national)
• An international organisation whose members include two or more countries, territories, or governments
• A corporation sole (a legal entity consisting of a single incorporated office occupied by a single person)

Despite not meeting the RLE criteria, ORPs are often recognized as PSCs.

What about non-compliance?

PSCs must notify the company within one month of becoming a PSC. If a PSC fails to notify or respond to a notice from the company, it is an offence. If a PSC does fail to comply, the company may impose sanctions related to the shares held by the PSC and the rights attached to those shares.

From the company's perspective, failure to comply with the PSC regime may result in the company and its officers (directors and secretary, if applicable) committing an offence.

What if my PSC does not want their details on the public record?

PSCs can apply for protection under the Companies House protection regime. This regime aims to protect PSCs, or individuals living with PSCs, from public disclosure if such disclosure may put them at serious risk of violence or intimidation. Individuals can replace their residential address with a service address on the public record without applying under the Companies House protection regime.

This is an updated version of a previously published article.